Collaborations

The UK Stewardship Code

The UK Stewardship Code 2020 sets high stewardship standards for those investing money on behalf of UK savers and pensioners, and those that support them. Stewardship is the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society.

The Code applies to:

• Asset owners such as pension schemes, insurers, foundations, endowments, local government pension pools and sovereign wealth funds.
• Asset managers who manage assets on behalf of UK clients or invest in UK assets.
• Service providers such as investment consultants, proxy advisors, data and research providers that support asset owners and asset managers to exercise their stewardship responsibilities.

Cost Transparency Initiative

Cost Transparency Initiative (CTI): an Independent group tasked by the Financial Conduct Authority in 2018 with delivering a standardised template for the disclosure of costs and charges to institutional investors.

UN PRI

The PRI is the world’s leading proponent of responsible investment. As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that environmental, social, and corporate governance (ESG) issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, asset classes and through time).

We also recognise that applying these Principles may better align investors with broader objectives of society. Therefore, where consistent with our fiduciary responsibilities, we commit to the following:

• Principle 1: We will incorporate ESG issues into investment analysis and decision-making
• Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and
• Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we
• Principle 4: We will promote acceptance and implementation of the Principles within the investment
• Principle 5: We will work together to enhance our effectiveness in implementing the
• Principle 6: We will each report on our activities and progress towards implementing the

Principles.

The Principles for Responsible Investment were developed by an international group of institutional investors reflecting the increasing relevance of environmental, social and corporate governance issues to investment practices. The process was convened by the United Nations Secretary-General.

In signing the Principles, we as investors publicly commit to adopt and implement them, where consistent with our fiduciary responsibilities. We also commit to evaluate the effectiveness and improve the content of the Principles over time. We believe this will improve our ability to meet commitments to beneficiaries as well as better align our investment activities with the broader interests of society.

We encourage other investors to adopt the Principles.

Pensions for Purpose

Pensions for Purpose is a collaborative initiative of impact
managers, pension funds, social enterprises and others involved
or interested in impact investment.
Its aim is to promote understanding of impact investment by
effectively sharing news stories, blogs, case studies, academic
research and thought leadership papers and acting as a first port of call for journalists seeking comment on impact investment related issues. As part of our fiduciary duty, we believe that Responsible Investment and Engagement is not just a moral imperative but an economic necessity.
We are committed to protecting the interests of our Client Funds and its members by acknowledging that climate related risks and broader environmental, social and governance (ESG) factors are a source of financial risk. We aim to make long term sustainable investments supported by data led and transparent processes. As an affiliate of Pensions for Purpose, we participate in thought leadership discussions to enhance and share our knowledge of impact investment.

Marine Conservation Society: Microplastic Pollution Collaboration

London CIV is supporting First State Investors (FSI) in collaboration with the leading UK-based science led charity, the Marine Conservation Society, and a number of like-minded investors, to support an investor engagement programme to engage with the manufacturers of domestic and commercial washing machines to fit, as a standard feature, filters to their products to prevent plastic microfibres entering the world’s precious marine ecosystems. This technology is available and today is utilised by very few companies. Scientific evidence of significant harm to marine biodiversity and ecosystems is emerging, as well as widespread public support for action.

Successful outcomes of the engagement programme will provide a significant contribution to Sustainable Development Goal 14, “Life under Water” specifically Target 14.1, “Reduce Marine Pollution”. The engagement intends to achieve

measurable outcomes to support investors’ stewardship related reporting and disclosures

ShareAction: The Good Work Coalition

ShareAction believes that work should be a source of fulfilment, dignity and respect. Good Work should be ‘engaging, give people a voice and treat them fairly, it should be good for their wellbeing, and help them to progress. It should be positive for individuals, but also lead to wider positive organizational and economic outcomes: higher levels of productivity and output, and greater innovation and adaptability’.

However, in many industries and countries minimum wages and prevailing industry wages fall short of living wages. Global inequality has doubled over the last decade, precarious work is increasingly becoming the new norm and it will be 100 years before we close the gender pay gap.

The Covid-19 crisis has brought into stark relief the value that many workers that our societies rely on to keep them operating are low paid workers on insecure contracts. In recent months there have been many calls for business, investors and governments to come to a new social settlement following the crisis and ensure that the workers that have borne the brunt of the crisis receive recognition and reward.

There is an existing body of international standards, conventions and declarations covering human rights, labour standards and conventions as well as guidance on how business should respect human rights. But in many cases the challenge is in implementation and enforcement.

Whilst the societal and moral case for good work is clear there is also a strong business case. There is evidence that good quality work is positively correlated with increased productivity, reduced absenteeism and sick leave as well as higher retention rates. Organisations where decision makers reflect the organisations from which they are drawn make better decisions.

The world’s largest publicly listed companies and their institutional investors can play an important role in

the way millions of workers employed directly, through contracts or in the supply chain experience work.

ShareAction is seeking to evolve its existing Living Wage Coalition to focus on a broader range of Good Work topics and seeking overtime to increasingly take an international focus these include: Living Wage, Insecure Work and Gender Equality for Low Paid Women.

ShareAction: The Healthy Markets Coalition

The Healthy Markets Coalition is a group of investors with over $1 trillion in AUM. This important initiative aims to increase accountability of food retailers and manufacturers for their role and impact on people’s diets and the growing concerns surrounding increasing levels of obesity.

With an estimated cost of obesity to the NHS of £6.1bn and £27bn in reduced annual economic growth costs. We believe that healthy eating and obesity is an urgent issue and something that companies should be acting on, particularly during the current global pandemic where the risk of dying from Covid-19 is 33% higher amongst people who are obese.

Addressing social issues which directly impact upon our beneficiaries and the wellbeing of London, as well as having the dual materiality of posing material financial risks are an important part of London CIV’s ongoing commitment to responsible investment.

ClimateAction100+

Climate Action 100+ is an investor initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change. More than 400 investors with more than $35 trillion in assets collectively under management are engaging companies on improving governance, curbing emissions and strengthening climate-related financial disclosures. The companies include 100 ‘systemically important emitters’, accounting for two- thirds of annual global industrial emissions, alongside more than 60 others with significant opportunity to drive the clean energy transition.

London CIV are participants in this important initiative. Recognising the risks climate change presents to our funds and our Clients Funds in the short, medium and long term. We support the Paris Agreement and the need for the world to transition to a lower carbon economy consistent with a goal of keeping the increase in global average temperature to well below 2 degrees Celsius above pre-industrial levels. We will work with the companies in which we invest to ensure that they are both minimising and disclosing risks whilst maximising opportunities presented by climate change and broader ESG factors.

LAPFF

LAPFF promotes the highest standards of corporate governance to protect the long-term value of local authority pension funds.

As a member of LAPFF, corporate responsibility and long-term shareholder value are two sides of the same coin. With investments in many of the largest global companies - we see first-hand the costs when things go wrong – company’s reputations with customers irrevocably damaged, companies fined billions for not adhering to the rules and excessive risk taking resulting in corporate bankruptcies.

That is why, acting together with the majority of the UK’s local authority pension funds and pool companies, the Forum leads the way on issues such as executive pay, reliable accounting and a just transition to a net zero economy. London CIV follow LAPFF guidance on engagement and have recognised significant and tangible improvements in the practices of some of the world’s biggest corporations since joining.

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FSB’s Task-force on Climate-related Financial Disclosures

The Financial Stability Board Task Force on Climate-related Financial Disclosures (TCFD) is a market-driven initiative, set up to develop a set of recommendations for voluntary and consistent climate-related financial risk disclosures in mainstream filings.

We believe that climate change will have significant impacts across many sectors and that we have an important role to play in ensuring transparency around climate related risks and opportunities. We commit to working together towards adoption of the recommendations. The Task Force’s recommendations will catalyse more consistent, comparable and reliable disclosure of climate related information that will facilitate more informed business and investment decision making. These disclosures are an important step forward in enabling market forces to drive efficient allocation of capital and support a smooth transition to a low carbon economy.

Asset Owner Diversity Charter

Through our commitment to the Asset Owners Diversity Working Group, we have joined forces with Lothian, NEST, London Borough of Camden and Brunel pension funds to formalise a set of actions the industry can commit to in order to improve diversity, in all forms, across the investment industry.

Diversity Project

London CIV are members of the Diversity Project, whose purpose is to accelerate progress towards an inclusive culture in the investment and savings profession. An inclusive culture across all levels supports more effective teamwork, gives wider perspectives, better investment decisions, better results for our clients and ultimately more sustainable businesses. The Project spans the whole range of the profession: asset owners, fund managers, fund selectors, pension consultants, actuaries, trustees, wealth managers and the professional standards and trade bodies. We believe that recognisable and measurable progress can be achieved over the Project’s five year timeframe.